These are the 10 most well-held stocks on planet earth

By Steven M. Sears

Major technology leaders were honored guests at President Trump's inauguration on Monday. Meta Platforms' Mark Zuckerberg, Amazon.com's Jeff Bezos, Apple's Tim Cook, and Alphabet's Sundar Pichai all sat near Trump's family.

On Tuesday, Trump and OpenAI, SoftBank Group, and Oracle announced an investment of as much as $500 billion in artificial-intelligence infrastructure.

The news capped a buoyant week in the markets, with investors reversing their bearish bent, which had been the predominant market trend since Christmas. The yield on 10-year Treasury bills declined from the equity-adverse level of 4.7% to about 4.5%. The U.S. dollar also declined, which should boost the earnings of America's multinational corporations.

The question for active investors to ponder is if these favorable conditions will persist. Trump threatened to levy tariffs of 25% on Mexican and Canadian goods on Feb. 1, as well as raise existing tariffs on Chinese goods. The administration could be threatening tariffs to compel Canada and Mexico to negotiate. The same is true of China.

The next course of action is unclear. Tariffs may or may not drive stock prices lower. Long-term investors, of course, should carry on and add to positions on weakness, but professional investors who live and die by quarterly results face uncertainties that are hard to forecast.

The U.S. stock market has awaited Trump with great anticipation. Analysts have focused on the corporations they cover, while fund managers have generally tried to remain focused on core issues, like earnings, inflation, and interest-rate cuts. But Trump looms over everything. He merits inclusion in financial models, though it is hard to know how to reflect his value.

Trump unusually represents the three states of risk and opportunity that influence stock prices and options volatility. He is at once a known known, a known unknown, and an unknown unknown. Should he communicate clearly and consistently, the stock market's fear gauge — as the Cboe Volatility Index, or VIX, is known — should remain subdued and stocks should rise. The opposite is also true.

Deep within the derivatives markets, sophisticated investors are far from sanguine. Futures on the VIX are elevated — which suggests such investors are hedging against a stock decline even though Trump's policies are expected to benefit stock investors.

The activity doesn't indicate active preparations for a sharp stock decline, as such investors always try to balance risk and reward. The trading is seemingly devoid of panic. Instead, think of the VIX futures curve as a way to express Ronald Reagan's dictum: Trust, but verify. VIX futures are a natural offset to potential stock declines.

Presidents have historically tried expanding their power over the legislative and judicial branches. Trump's domination of the Republican Party, coupled with an electorate that appears to be tilting right, might enable him to achieve that.

We recently suggested that investors hedge, and that remains relevant. But opportunity may exist in the technology sector. To embrace that thought, investors can consider a bullish strategy on the Technology Select Sector SPDR exchange-traded fund .

With the ETF at $236.02, investors could buy the June $240 call option and sell the June $255 call for about $6.60. If the ETF is at $255 at expiration, the bull spread is worth a maximum profit of $15.

The strategy, which entails buying a call and selling another with a higher strike and similar expiration, is used when investors want to cost-effectively harness an asset that is expected to rally. (A call option gives the holder the right to sell an asset at a set price within a set period.)

The trade anticipates that the ETF sets a record high. That might seem ambitious, but remember who sat near Trump when he retook the oath of office.

Email: editors@barrons.com

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Monday 1/27

A crowded earnings calendar is headlined by Big Tech reporting midweek. AT&T announces quarterly results on Monday, followed by General Motors, Lockheed Martin, RTX, and Starbucks on Tuesday. ASML Holding, Meta Platforms, Microsoft, and Tesla release earnings on Wednesday, while Apple, Caterpillar, Mastercard, and Visa follow suit on Thursday. AbbVie, Chevron, Exxon Mobil, and Novartis close out the week on Friday.

Wednesday 1/29

The Federal Open Market Committee announces its monetary-policy decision. The FOMC is widely expected to keep the federal-funds rate unchanged at 4.25% to 4.5%. With the economy and labor market still resilient, and inflation stubbornly above the Federal Reserve's 2% target, the central bank is in wait-and-see mode as it assesses incoming economic data.

Friday 1/31

The Bureau of Economic Analysis releases the personal consumption expenditures price index for December. Economists forecast a 2.5% year-over-increase, one-tenth of a percentage point more than in November. The core PCE index, which excludes volatile food and energy prices, is expected to rise 2.8%, matching the November figure.

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Starbucks CEO Brian Niccol has become one of the highest paid CEOs in the S&P 500 index when compared to how much the company's employee base gets paid. The ratio of Niccol's annual total compensation for 2024 was 6,666 to 1, Starbucks says. Niccol took over Starbucks' top job in September. According to a WSJ analysis of data from MyLogIQ, the pay ratio is among the highest for major companies. In 2022, Live Nation CEO Michael Rapino made 5,414 more than the median worker at the world's largest concert promoter. In 2021, Amazon CEO Andy Jassy made 6,474 more than the median worker at the online retailing giant. Tesla for 2018 reported that Elon Musk made more than 40,000 times the median worker there, although that pay package was later thrown out by a Delaware judge.(sabela.ojea@wsj.com; @sabelaojeaguix)

US equity indexes rose this week as Netflix's (NFLX) earnings aided risk appetite while President Donald Trump announced a $500 billion artificial intelligence infrastructure program and alleviated concerns over harsh trade tariffs.

* The S&P 500 closed at 6,101.24 on Friday, versus 5,966.66 a week earlier and the Nasdaq Composite stood at 19,954.30 compared with 19,630.20 the week prior. The Dow Jones Industrial Average stood at 44,424.25 versus 43,487.83 a week ago. The S&P 500 made two new intraday record highs this week, while the Dow and the Nasdaq traded close to their all-time peaks.

* Communication services and technology topped sector charts. Arm Holdings , Oracle , and Microsoft were among the top mega-cap outperformers. Nvidia and Broadcom also contributed strongly to market gains.

* Netflix boosted risk sentiment after reporting subscriber growth and earnings well above market expectations.

* SoftBank, OpenAI, Oracle, and MGX are the initial equity funders of Stargate, the AI infrastructure project unveiled by Trump. Arm, Microsoft, and Nvidia are among the key technology partners.

* Trump stopped short of announcing fresh import duties this week but said his administration plans to impose 25% tariffs on Mexico, Canada, and China, possibly from Feb. 1. Tariffs will likely come slower than anticipated or at least implemented more tactically to secure better trade deals, cooperation on ending illegal immigration, and deter military conflict, as opposed to implementing a "one size fits all" strategy, Stifel Chief Economist Lindsey Piegza said.

* The US dollar index fell 0.5% to 107.46 late Friday, its lowest in about five weeks, as Trump advocated lower oil prices and inflation while calling for a cut in interest rates. He also told Russian President Vladimir Putin to end the war in Ukraine or face new sanctions.